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Richmond Fed President Optimistic About U.S. Economy
Investing.com —Â The Federal Reserve is “making real progress” in its bid to corral elevated inflation back down to its 2% target without sparking a meltdown in the broader economy, according to Richmond Fed President Thomas Barkin.
During an event in North Carolina, Barkin explained that there’s a strong case for the argument that the U.S. is on track for a “soft landing,” with demand, employment, and price gains now appearing to return to normal.
“The airport is on the horizon,” Barkin said optimistically. “But landing a plane isn’t easy, especially when the outlook is foggy, and headwinds and tailwinds can affect your course.”
While Barkin sees a soft landing as “increasingly conceivable,” he also highlighted four key risks to this scenario, including “above-normal” price increases by businesses and potential unforeseen shocks to the financial system from geopolitical events. Barkin also mentioned the potential for additional rate hikes still being “on the table.”
Following the Fed’s recent decision to leave rates unaltered, new forecasts from policymakers suggest a more dovish outlook, hinting at possible rate reductions. This speculation has fueled a late-year surge in stocks, although many officials have attempted to temper this enthusiasm. More insight into the U.S. central bank’s thinking is expected to come from the minutes of the Fed’s latest gathering, due out later on Wednesday.
